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Craig Donato Discusses Future of Online Classifieds

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[ Technology]

[It's been almost two years since I first started chatting to technology innovators about the future of search. This article get's the ball rolling again.]

When Oodle burst on to the scene back in March of last year, it instantly became a hit among those looking for a more efficient way to search, scan and subscribe to classified ads. Oodle started life with coverage of just three major cities; Dallas, Chicago and Philadelphia. Today, Oodle serves more than fifty cities and over one hundred colleges including Cal State campuses, Northwestern, Ohio State, Rutgers, Villanova, Kent State and Harvard.

I had a chance to interview Oodle’s CEO and co-founder, Craig Donato, and asked him about the role online classified search will play in the future and what plans Oodle has to lead the way.

[Andy Beal] Consumers still seem to turn first to local newspapers when searching classifieds. What trends are you seeing that suggest people will switch to online classifieds?

[Craig Donato] Classifieds are simply better when used online – for both consumers and advertisers. It’s easier for consumers to find what they’re looking for:

It’s easier to search & browse online;

It’s more effective to qualify interest when listings contain more descriptive information (e.g., more text, photos, virtual tours, etc.); and

It’s quicker to make contact (just drop a seller an email).

For sellers, online listings are more convenient and cost effective:

Ads can be purchased more cheaply and in many cases are free;

It’s easier to accept inbound requests via email (using an anonymous screen name);

Listings attract better prospects when they contain more descriptive information; and

Advertisers can edit or delete a listing at any time.

Already, there are many more listings online than in local newspapers. This may be surprising, but the number of online listings that Oodle tracks in a typical metro would fill about two dozen newspapers cover to cover every day.

[AB] So does this mean the end of print classifieds?

[CD] Despite conventional wisdom, the shift online is an opportunity for newspapers. They continue to invest in their online offerings and maintain close relationships with local advertisers (real estate agents, car dealers, property managers, employers, etc.). Print also isn’t going to disappear. There will always be the coffee shop browsing audience (people flipping through papers looking for jobs and apartments).

[AB] What is Oodle doing to ensure smooth relationships with classified content providers?

[CD] We’ve worked hard to align Oodle with the business model of classified publishers. We deliver qualified prospects to publishers and their respective advertisers. We also take steps to avoid conflicts of interest. For example, we don’t allow users to post listings directly in Oodle. Instead, we point potential sellers off to publishers in our index. And from our search results, we send users directly to listings on the classified sites (instead of a jump page).

[AB] Do you plan to introduce your own online classified listings?

[CD] We don’t have any plans to introduce our own classified listings. That would put us in competition with the classified providers in our index. We did recently introduce a directory that promotes the classified publishers in our index.

[AB] Do you have any exclusive agreements in place with offline classified providers, to get their content online?

[CD] No. I don’t think it’s in any publisher’s interest to provide exclusive access to their listings. To best help their advertisers, they should promote their listings broadly.

[AB] You’ve been very vocal about Google Base. What threat does Google and the other major search engines pose to Oodle?

[CD] We’ve commented on Google Base because we believe it will be a major agent of change in the classifieds industry. The business model for classifieds has long been poised for change – from a broadcast advertising model (with upfront fees) to a direct marketing model (where one pays for performance). However, existing players won’t change without a major threat to force the issue. Google Base is that threat. Google has no existing classifieds business to protect and it has a history of effecting such change in online advertising.

We also plan to look for ways to partner with Google. We had fun integrating Google Maps when they opened their API. And we’re looking forward to doing the same with Google Base.

[AB] What are some of the innovations Oodle is working on to take leadership in the online classifieds space?

[CD] In terms of competing with larger search engines, we’re making the bet that by focusing on classifieds we can provide an application that better addresses needs of consumers. Hopefully we can capitalize on the many subtleties we’ve come to appreciate with online classifieds. I don’t want to outline our product roadmap but over the course of 2006, Oodle will look less like a search engine and more like an application for classifieds that’s anchored in search.

[AB] Any plans to reach out to existing communities and offer to build them a community-driven classified portal. You’re working with colleges, any other verticals planned?

[CD] We are talking to a number of publishers about integrating Oodle results into their platform. Hopefully, we can talk more about this in the next few months.

[AB] How are things different than you might have imagined a year ago?

[CD] When we launched, we weren’t sure how the market would react. We’re very happy that our lead referral model has been so well received by newspapers and other classified providers (with the notable exception of Craigslist).

To a large extent, I think this is because the business model for classifieds seems to be evolving more quickly than we imagined. When we started Oodle, classifieds seemed like a sleepy backwater on the Internet. Now Google and Microsoft have rediscovered the category. Major newspapers, such as Tribune, NYTimes and Knight Ridder, are beginning to get very aggressive. Online community sites, from MySpace to niche verticals like WineBusiness, are increasingly integrating classifieds as another form of online conversation. Should be an interesting year

[AB] Thanks Craig for providing your insights!

Andy Beal is an internet marketing consultant and considered one of the world’s most respected and interactive search engine marketing experts. Andy has worked with many Fortune 1000 companies such as Motorola, CitiFinancial, Lowes, Alaska Air, DeWALT, NBC and Experian.

You can read his internet marketing blog at Marketing Pilgrim and reach him at andy.beal@gmail.com.

Craig Donato Discusses Future of Online Classifieds
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